New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-05-10
BUSINESS PROFITS.
A FREE TRADE ECONOMIST ON THE Proc

A. WALKER.
1t lis unfortunate perhaps, for the country, and
certainly for Professor Walker, that he seems
unable or unwilling to cope with the problems
which confront who studies the facts OF actuai
lie. In his zeal TO perfect a rounded and coin-
pleted theory. he forzets that such theory conid
III onl the dongs OF ideal beings, devoid ailKe Oh
the higher human motives which lift man above
nero selfish greed, and of the proneness 10 cheat
and to plunder which mere seliishness engenders'
II il were desired to know what Impossible beings
would do in an impossible world, Mr. walker
would be one of the most eminent teachers. But
1t is not desirable, and his contributions to the
Science of the Money-Getting Function OF the
Economic Man arc as useful TO the worid III "hien
we live as the chemical analysis of dream.
Professor Jevons had said that the wages or
man are ultimately coincident with what ne pre-
duces. after the deduction of rent, taxes and the
interest of capital Professor Sidewick had
observed that this did not attempt to settle the
distribution of produce between employers ana
emnloyed as respects the wages OF super
iutendencey and that in practical discussions thls
usually appeared the most prominent element vi
tho problem.n Professor Walker thereupon con-
siders that theory of the origin of business prohtS
would u sugply Just what was lacking, and in con-
function with well-approvtd theories OF rent
interest and wages p complete ard consistent oouy
of doctrine regarding the distribution OF weai'h'
What other student or teacher would venture 10
Say that shere is such " completed and consistent
body of doctrine" in view of tho destructive
criticism of recent years7 Bat Professor walker
thereupon begins by asking what would be the
share Of employers if they constitnted distinct
class. all of whose members were equal among
themselves In point of business ability and business
opportunitiesu How does this enlighten MS aoout
the profits of body of men who do not constitute
a distinct class, who are sometimes workers anu
sometimes employers, aud sometimes both, ana
who arc conspicuousy not equal in any respect
Careful perusal of President Walkers paper fails
to show.
This imaginary employer would earn wages no
greater than the wages OF labor" But IN the
actual world Professor Walker sees many employers
who earn losses instead of profits Others accumu-
lato little or nothing But the masters of industry
accumulate q surplus which, Professor Walker
holds, represents only that which each is able to
produce over and above what an employer OF the
lowest Industrial grade can produce with equal
amounts OF labor aud capital" This has truth
in it, but it is not true If the reasoning is sound,
all the difference between the gains of tho most
successful in production and the losses oil the least
successful belongs to the masters of industry For
upon the Professors reasoning. it Is not the merely
unsuccessful but the least successful class OF
employers which fix the normal wages OF super
intenlenco and the least successful sink all they
have and all they can borrow
Tho truth that underies this theory is that
exceptional efficiency in superntendence through
exceptional production, does strictly earn
exceptional rewards. Pcchaps this truth Is not
quite new, and not of great scientific value, but 1t
is this truth aud other which is contained IN the
Professors theorem. The fact is that the ranks of
ha a1a If
normal wages of superintendent were not greater
than the wages of labor. Nature does not 30
blunderingly arrange matters in the actual world.
The average employer gets certain RETURN IN
social position, in mode of living in pecnnary
credit. and in money received, beyond the wages
he could earn as lsborer. and the Professors
theory fails entirely to help us in liking the meas
nre Of such increased return. 1t is certainly not
the difference between his profit aud the loss OF
the most unsuccessful. Yet the ranks of employers
would never be full if they were not constantly
recruited from the list OF predestned losers 1t is
also certain that the normal earned or rightful
profit - lot the profit actually realized by the body
of employers as a WHOLE however that may be
divided. Part of that profit is secured by mere
Iuck, without corresponding efficiency in prodnc-
tion inst rs part of the capital invested is lost by
bad fortune, without corresponding inefhciency In
production. Were there not this element oil
chance-one might almost say of gamblng-in all
business ventures, the ranks of employers would
never be sufficiently filed. Bnt, moreover, some
successful ployers get their surplus by one or an
other Of the myriad forms of theft really producing
nothing or nothing IN excess of the norm al produc
ton Of labor without superintendent just as some
produce much but have it stolen from them by the
tricks of sharper men. Professor Walk er's Econom
ie Man, who has only Just as much good fortune
and lust as much honesty or dishonesty as every
body else of his class has not yet been discovered,
and what his profits would be is not yet practical
question.
The world of wage-earners want to know bow
mnch belongs to the employer. and how much is
only stolen from them or from somebody else.
That is the one question they care about, and the
learned professor only tells them that the surplus
Of tho employer, if really produced according to
theory, would not come from wages nor from con-
sumers in the form Of an increase of prices. The
theory is reasoned With skill. If the surplus
capital of the employer does result in larger pro-
duction than could by others be realized with the
came capital and labor. then the surplus does not
necessarily come from consumers, because the more
economic production tends to cheaper the product
Neither does it usually come from wages, because
the most successful employers are usually those
who pay tho best wages. But the practical
question Is whether the employer in any given case
mas actually earned a surplus by experimenting
skill or has merely stolen it, or by good luck
obtained it from others without merit Just there
whore tho practical question begins Professor
Walkers theory falls silent.
lilo urges, it is true. that Z" well-approved prin-
ciples of political economy will not allow us to
question that the price of the whole supply of a
product is liked by the cost of producing under
direction of employers of tho least capable class
Mr. Armour's recent bull movement in pork. then,
proved that less competent class of employers
than before had become necessary to produce a
sufficient supply. Armour did not 30 understand
it, He thought 1t proved that he could rig the
market better than the spectators the other